President Joe Biden, his administration, and Democrats love green companies – except, of course, for Tesla Motors. They adore them so much that they shower these businesses with taxpayer dollars, subsidizing firms aiming to usher in a world of renewable energy and green products, even though they have a poor record of helping the nation at a time of inflationary peril. Proterra had been a company the White House and Wall Street loved. And yet, despite a bullish environment for all things environmentally friendly, the electric bus and battery maker filed for bankruptcy. Is this a Solyndra redux?
The Rise and Fall of Proterra
The California-based organization filed for a voluntary Chapter 11 bankruptcy in the District of Delaware, according to an 8-K filing with the Securities and Exchange Commission on Aug. 8. Executives are looking to reorganize the company to “strengthen its financial position.” The business plans to maintain operations, pay employee salaries and benefits, and compensate vendors and suppliers. Proterra blamed market “headwinds” for its pecuniary challenges.
In the meantime, the Proterra stock will be delisted from the Nasdaq Composite Index on Aug. 17. Shares cratered following its second-quarter earnings, driven by a quarterly loss of $31 million and $175.9 million in debt, including $22.4 million in interest. “The foundation we have built has set the stage for decarbonization across the commercial vehicle industry as a whole, and we recognize the great potential in all of our product offerings to enable this important transformation,” said Proterra CEO Gareth Joyce in a statement. “This is why we are taking action to separate each product line through the Chapter 11 reorganization process to maximize their independent potential.”
But why should anyone care about some green energy business based in The Golden State?
Biden Loves Proterra
Since Jan. 2021, Proterra has been championed by the current administration several times. In Apr. 2021, President Biden hosted a virtual White House event highlighting its South Carolina manufacturing facility. Biden repeatedly touted Proterra as an electric vehicle success story, emphasizing his green energy initiative that includes $25 billion for zero-emissions transit vehicles and $20 billion for electric school buses.
Administration optics also provided the company with some free advertising. In Apr. 2021, Vice President Kamala Harris visited Thomas Built Buses, an electric school bus maker. On the company’s website, it reads: “PROTERRA… Want a partner that can go the distance? Meet Proterra, our partner in production…” The connection between the White House and Proterra does not stop at advertising.
Jennifer Granholm (Photo by Chris Saucedo/Getty Images for SXSW)
Energy Secretary Jennifer Granholm previously served on Proterra’s board of directors and owned company shares in her first few months in her post, eventually divesting in May 2021. She enjoyed a net gain of nearly $2 million. Moreover, the administration appointed Joyce to serve on the White House Export Council, a federal advisory committee on international trade.
“Gareth Joyce serves as Chief Executive Officer and Board Member at Proterra. Joyce brings to Proterra a long and distinguished career that spans the automotive, aviation, and consulting industries with a consistent focus on environmental sustainability and decarbonizing the transportation sector,” the White House said in February. “Through his leadership, Joyce is growing Proterra’s EV battery manufacturing footprint in the United States and accelerating the transition of transit and other commercial vehicles to zero-emission solutions.”
Another Solyndra?
In 2009, Solyndra, a US-based firm that manufactured solar panels utilizing a cylindrical design of copper indium gallium selenide thin-film cells, received a $535 million loan guarantee from the Obama administration. The company had already struggled to generate a profit, but officials thought the taxpayer funds would be enough to keep the business afloat. Two years later, Solyndra filed for bankruptcy. It only repaid $24 million of the loan. In addition, the Department of Energy discovered in Dec. 2010 that the organization was violating the terms and conditions of the US government loan agreement, but officials quietly changed the provisions to ensure Solyndra still received taxpayer money.
This was in addition to the lavish cash extended to Abound Solar ($401 million), Calisolar ($280 million), and Fisker Automotive ($193 million).
More than a decade later, the American people are having a case of Deja vu all over. However, instead of only a handful of small green companies receiving a handout, wealthy corporations are also receiving generous subsidies from the Inflation Reduction Act, the CHIPS and Science Act, the bipartisan infrastructure law, and the American Jobs Plan. In other words, from foreign corporations to large US businesses, everyone is putting their hands in the cookie jar.
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
As Liberty Nation reported in April, a non-partisan Joint Committee on Taxation (JCT) study discovered that big banks, corporations, and Chinese-linked entities would be the primary beneficiaries of the plethora of tax breaks and subsidies inside the Inflation Reduction Act. “With big banks pocketing three times more of these special interest tax breaks than any other industry, it’s clear Democrats are rewarding their friends on Wall Street that push their partisan ESG [environmental, social, and governance] agenda,” said Rep. Jason Smith (R-MO) in a statement.
Even job creation is being subsidized by these supposed legislative triumphs. LG and Honda, for example, are building two new plants in Ohio that will cost taxpayers $22 billion. The promise is that 4,200 new jobs will be created, meaning each new green position will cost taxpayers about $4 million.
It is unclear as to how much taxpayer funding Proterra received. But it is quite likely that it tapped into all the taxpayer-funded capital offered by Washington, which may or may not be equal to Solyndra.
Green With Envy
Proterra was a case of the US government picking winners and losers and nudging the marketplace. Even if it did not receive a single tax dollar, the company received plenty of publicity and an endorsement from the White House. The administration wants the US to go green, so it will hand out corporate welfare like candy, despite demanding that these same corporations pay their fair share. How many more Solyndras and Proterras will there be by the decade’s end? Worst of all, how many more zombie green firms are being propped up by subsidies right now?
